Establishment and Production Costs. Grapefruit. Western Riverside County, 1998

Transcription

1 Establishment and Production Costs Grapefruit Western Riverside County, 1998 Etaferahu Takele Area Farm Advisor, Agricultural Economics/Farm Management University of California Cooperative Extension, Southern Region And Peggy Mauk Farm Advisor, Subtropical Horticulture University of California Cooperative Extension, Riverside County Establishment and Production Costs for Grapefruit, UCCE Riverside County, 1998 Page 1

2 Establishment and Production Costs for Grapefruit Riverside County, 1998 INTRODUCTION Detailed costs for grapefruit grove establishment and production in Riverside County are presented in this study. The hypothetical grove used in this report consists of a total of 40 acres, 38 of which are being either newly established, or replanted, and the remaining two acres are in buildings and roads. We base this study on assumptions of production practices and costs that are considered typical for grapefruit grove establishment and production in Riverside County. These production practices and costs are an amalgamation of costs and practices obtained from a survey of growers and other agricultural institutions in the region. Sample costs given for labor, materials, equipment and contract services are based on 1998 prices. This study is intended as a guide. It can be used in making production decisions, determining potential returns, preparing budgets and evaluating production loans. Costs are presented in seven tables. All costs are presented on a per acre basis. Table 1. Establishment Costs Table 2. Production Costs Table 3. Production Costs and Returns Table 4. Monthly Cash Costs of production Table 5. Whole Farm Equipment Prices and Investment Costs Table 6. Hourly Equipment Costs Table 7. Range Analysis For questions, call the Southern Region Agricultural Economics/Farm Management Advisor, Etaferahu Takele, University of California Cooperative Extension, at (909) ext. 243 or call the Riverside County Subtropical Horticulture Farm Advisor, Peggy Mauk, (909) ext Establishment and Production Costs for Grapefruit, UCCE Riverside County, 1998 Page 2

3 ASSUMPTIONS The following is a description of the assumptions used in the preparation of this cost study. 1. LAND The grove is established on ground that is currently open land. The land is assumed to have decomposed granite to clay loam soils that are adequately drained and moderately fertile. Value of land in southern California varies tremendously by region. In some parts of the Grapefruit production area in Riverside County, value of land has been indicated to be as high as $35,000 per acre. In this study, we assumed a value of $8,000 per acre for open land. Because only 38 of the 40 acres are planted to grapefruit, land is valued at $8,420 per planted acre. Readers are cautioned that the $8,000 we used in this study may be understating the value of land. 2. CULTURAL PRACTICES The practices described below represent only the hypothetical grove in this study, which is based on typical practices for many groves in Riverside County. However, it may not apply to every situation. Also, pesticides, rates, and cultural practices mentioned in this cost study are listed in the University of California Integrated Pest Management Guideline for Citrus. Written recommendations by licensed pest control advisors (PCA) are required for many pesticides. Information for pesticide regulation and pesticide use permits can be obtained from the local county Agricultural Commissioner's office in Riverside. For additional production information contact the Riverside County citrus farm advisor. Land Preparation: The land is ripped twice with a three-foot ripper and then leveled with a land scraper followed by marking and layout. The approximate per acre custom cost of the operations include $300 for ripping and leveling, and $100 for marking and layout. All ground preparations are done in the year prior to planting, but costs are shown in the first year of establishment. Fumigation with Methyl Bromide or Vapam has beneficial effects for controlling nematodes, diseases and weeds, especially in groves that are planted back to citrus. However, in this study, the cost of grove fumigation is not included. Planting: In this study, we assumed a planting space of 12 x 24 foot spacing with 152 trees per acre. In the second year of establishment, we assumed that 2% of the original stand or 3 trees per acre would need replacement. Planting is done using contract labor. Irrigation: The amount of irrigation water and costs in Riverside County varies greatly from region to region. Also, irrigation costs vary depending on if well or district water is used. Grapefruit production in Riverside County is mainly that of Ruby Red and Star Ruby varieties. They are produced in the Coachella Valley and San Jacinto/ Temecula Valley. In this study, costs and cultural practices reflect the San Jacinto/Temecula Valley. An estimate of amount of water application by age of tr is shown in Table A. Actual irrigation amounts will vary depending on the amount of rainfall and region. We made no assumptions about effective rainfall. Also we have not included irrigation that may be neede for several days for frost protection. Establishment and Production Costs for Grapefruit, UCCE Riverside County, 1998 Page 3

4 Typically irrigation in the San Jacinto/Temecula area begins in March and ends in November or December, although this varies greatly depending on the amount of rainfall. In this study, district water is used for irrigation and is calculated at an average of $160 per acre-foot for th San Jacinto/Temecula area. In addition labor cost is included for irrigation operations such as turning the system on, monitoring and maintaining irrigation lines and sprinklers. Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 + Table A. Applied Irrigation Water San Jacinto/Temecula Area 6.00 Ac In 9.00 Ac In Ac In Ac In Ac In Ac In Pruning: Hand pruning normally begins in the second year of establishment. It is done annually until the trees reach age 5. Hand pruning of young trees will take about 5 minutes per tree. The operation consists of removing deadwood, which will facilitate the development of new shoots and laterals. This operation also creates access for easy harvest. Hand pruning of trees of age six and older takes place about every fifth year and is estimated to cost $300 per acre. The annual cost of pruning is determined by prorating the cost over five years. Mechanical hedging and trimming of grapefruit trees begin around age 11 where clippings are placed in the row middles and are chopped using a flail mower. Hedging and trimming is done about every 4 years. The cost of hedging and trimming is estimated at $150 per acre. The annual cost is determined by prorating the total cost over the productive life of the trees. Insect and Disease Management: The primary pests affecting grapefruit production in Riverside County are ants and scales. They are controlled using Lorsban. It is applied once a year to the lower trunk of the tree, as well as the soil at the base of the trunk and directly to anthills. Lorsban is applied at 4 pints per acre for the four years of establishment and then 2 pints per acre from year four on. Thrips can be a problem during the first few years of grapefruit grove establishment. Treatment for thrips typically includes an application of Dimethoate once or twice a year depending on the population. Sabadilla is another common insecticide used to treat thrip infestations. In this study we included an application of Dimethoate at 4 pints per acre per year. In Western Riverside County, California red scale and brown garden snails are controlled using biological control agents. California red scale can be controlled by releasing Aphytis melinus at a rate of 40,000 per acre. Releases are made every 1 to 3 years at a cost of $70 per acre. For this study, we used an average of $70 every 2 years. Brown garden snails can become a significant problem in Riverside County. Infestations can be prevented, or contained, using several methods. In this study growers use predatory decollate snails to control brown garden snails. Other common methods include applying poisonous bait and painting tree Establishment and Production Costs for Grapefruit, UCCE Riverside County, 1998 Page 4

5 trunks with liquid copper. In this study we included the cost of predatory decollate snails. Predatory decollate snails are released on an average of once every five years at a cost of $25 per acre. Phytopthora root rot and gummosis are two fungal diseases common to citrus trees grown in Riverside County. A spot treatment of fungicide is applied to infected trees. Common fungicides used are Aliette and Ridomil. In this study we used a yearly fixed amount of two-thirds pound of Ridomil during both establishment and production. Treatment amounts can vary from year to year depending on the extent of infection. In the production years, brown rot, caused by two species of the fungus Phytophthora is treated annually with copper sulfate. Copper sulfate is applied at a rate of 3 lbs per acre during the fourth year of establishment and 5 lbs per acre per year thereafter. Brown rot control is done to protect the fruit from fungal spores that are splashed onto fruit during the rainy season. This application also has a benefit for frost protection. Many growers in Western Riverside will apply a second treatment if the rainy season is particularly heavy or long. Grove Floor Management: Weed control of broadleaf grasses begins in the first year of establishment by applying Roundup down each tree row. It is applied at 1 quart per acre during years one and two of grove establishment. It is important not to spray Roundup on the trunks of young trees. In the second year and continuing through mature production, spot sprays of Roundup (approximately 25 ounces per acre per year) are used to control sporadic weed growth. Starting in the third year of establishment, and continuing through mature production, a pre-emergent herbicide is used to control weeds in the tree rows. The herbicide program assumes Karmex is the primary emphasis for weed control. If a grower relies solely on Roundup, the costs of weed control would be higher. In this study, we used Karmex applied once per year at 4 lbs per acre in the early spring starting in year 3. Fertilization: Nitrogen (N) fertilizer is applied through the irrigation system. The approximate amount of fertilizer applied during the establishment and production years is shown in Table B. Fertilizer is generally applied throughout the year. Table B. Pounds Of Nitrogen Fertilizer Applied During Grapefruit Grove Establishment and Production Establishment Year Pounds of N Per Tree Pounds of N Per Acre Year Year Year Year Year Year Citrus trees grown in the southern region of California can be deficient in micronutrients. In this study, two foliar sprays of a micro-mineral fertilizer of zinc sulfate and manganese sulfate are annually applied to a new flush of leaves before they are fully expanded (i.e. at 2/ 3 of expansion) in spring and late summer. The nutrients are applied at 2 lbs per acre in year one, 3 lbs per acre in year two, 4 lbs per acre Establishment and Production Costs for Grapefruit, UCCE Riverside County, 1998 Page 5

6 in year three and 5 lbs per acre from year four on. Also phosphorous acid is applied at 1 lb per acre per year from year 5 on. Vertebrate Pest Management: Vertebrate pests require constant control in grapefruit groves. The principal pest is gophers. Gophers can cause severe damage to a tree by feeding on the root system and on the bark of the tree below the soil line. Squirrels can cause erosion problems by tunneling through the soil, especially on hillsides. They may also occasionally gnaw on fruit and irrigation tubing. In this study, costs of trapping and baiting are included for controlling gopher and squirrel populations. We estimated about $10 per acre per year would be required for gopher and squirrel control. Growth Regulators: 2, 4-D may be applied to mature groves for the delaying of harvest, and for increasing fruit size. In this study, 2,4-D is applied at a rate of 30 g.a.i. (grams active ingredient) per acre in December and May. The application of 2,4-D in spring is usually when the new crop size is at 3/4 inch diameter. 3. YIELDS Grapefruit trees can begin bearing fruit in the third year after planting. We consider years 1 to 5 as establishment and in year 6, we presented an estimate of an average yield from year 6 to life of the grove. Yield is measured in boxes as shown in Table C. Table C. Typical Yield of Grapefruit Per Acre in Riverside County Age of Tree Boxes Per Acre * Year 1 0 Year 2 0 Year 3 76 Year Year Year * A box weighs approximately 50 pounds 4. HARVEST AND MARKETING Harvesting starts in the third or fourth year. In this study, harvesting is done using contracted labor. Harvesting consists of three to four picks per year and is typically done from January through September. Growers also contract hauling to a local packinghouse. Charges for picking, hauling, packing and marketing are approximations obtained from several packinghouses in the region during the 1995 to 1998 seasons. Costs are based on an average distribution in which 46% of the fruit is packed and marketed fresh, 52% is used as juice and 2% is discarded as rot. These distributions are based on data from packinghouses and the Riverside County Agricultural Production Report. We used the following rates: $1.30 per field box for picking, hauling, forklift use and field overhead, $3.70 per field box for packing and marketing, and $0.50 per field box for juice handling. Establishment and Production Costs for Grapefruit, UCCE Riverside County, 1998 Page 6

7 5. PRICES/RETURNS We used a price/gross return of $5.25 per field box as a basis of our analysis. It is based on information obtained from packinghouses and the Riverside County Agricultural Production Report for 1995 to 1998 seasons. However, to cover a broader scenario of productivity and prices, we provided a range analysis in Table LABOR Labor hours for machinery operation is calculated at 20% higher than the actual operation time to account for such activities as equipment setup, moving, maintenance and repair. We used hourly wage rates of $9.25 for machine labor and $7.45 for non-machine labor. This is based on wages paid by the growers. Growers also pay for benefits including, Workers Compensation, Social Security, Medicare, insurance, and other possible benefits. In this study, we added 34% to the hourly wage to account for benefits. This brings the hourly rate to $12.40 for machine labor and $10.00 for non-machine labor. 7. MANAGEMENT This study does not include management charges. Users of this cost study should include their own management charges. 8. CASH OVERHEAD Interest On Operating Capital: Interest on operating capital is based on cash operating costs and is calculated monthly until harvest at a nominal rate of 10.00% per year. A nominal interest rate is the going market cost of borrowed funds. Property Taxes: Counties charge a base property tax rate of 1% on the assessed value of the property. In some counties special assessment districts exist and charge additional taxes on property including equipment, buildings, and improvements. For this study, county taxes are calculated at 1% of the value of land. County taxes are also calculated at 1% of the average value of equipment, buildings and improvements. Average value equals new cost plus salvage value divided by 2 on a per acre basis. Property Insurance: Property insurance for farm investments vary depending on the assets included and the amount and type of coverage. In this study, property insurance is calculated at 0.713% of the average value of the assets over their useful life. Liability insurance covers accidents on the farm and costs $455 for the entire farm. Office Expense: We included office and business expenses at $50 per acre. These expenses are to account for office supplies, telephone, computer, fax, copier, bookkeeping, accounting, legal fees, etc. 9. NON-CASH OVERHEAD Non-cash overhead costs include depreciation and interest charged on equipment and other investments. Typically, farm equipment in Riverside County is a mixture of new and old equipment. To reflect such mix in this study, the current purchase price for new equipment is reduced by 40%. Depreciation: Depreciation is a reduction in market value of investments due to wear, obsolescence, and age. Depreciation in this study is calculated on a straight-line basis, i.e. purchase price minus salvage value divided by years of life of ownership. The purchase price and years of life are shown in Table 5. Establishment and Production Costs for Grapefruit, UCCE Riverside County, 1998 Page 7

8 Interest On Investment: The interest charge for the use of capital in grapefruit production is calculated by multiplying the value of land and average investments in equipment, buildings, trees, etc. (described in Table 5) by 7.81%; the long-run average rate of return to California s agricultural production assets from current income. Average investment for equipment, building and improvements equals the new cost plus salvage value divided by EQUIPMENT OPERATING COSTS Equipment operating costs consist of fuel, lubrication, and repairs. These costs are first calculated on a per hour basis and then converted to a per acre basis. The hourly charges are shown in Table 6. Repair costs are based on purchase price, annual hours of use, total hours of life, and repair coefficients formulated by the American Society of Agricultural Engineers (ASAE). Fuel and lubrication costs are also determined by ASAE equations based on maximum PTO hp, and type of fuel used. Fuel and repair costs per acre for each operation are determined by multiplying the number of hours required for each operation by the hourly operating costs for that piece of equipment. Operation times are determined based on the equipment width, speed of operation, and efficiency. Tractor time is calculated at 10% higher than implement time to account for setup. Prices for fuel include on-farm delivery charges of $0.76 per gallon for diesel and $1.16 per gallon for gasoline. 11. ESTABLISHMENT COST The establishment period included five years in our study. This is because trees are assumed not to reach mature production until year six. This is different from the establishment years in the United States Tax Code, which includes only through year four of establishment. For tax purposes growers should consult the Farmer s Tax Guide or a tax accountant. For this study, the Total Accumulated Net Cash Cost on Table 1, in the fifth year represents the establishment cost. The cost is $7,488 per acre or $284,582 for the 38-acre grove. The establishment cost is spread over 35 productive years. 12. RISK This study makes every effort to model a production system based on typical, real world practices of grapefruit production. However, it would not fully represent financial, agronomic, and market risks, which affect the profitability and economic viability, involved in all grapefruit production. Risk is caused by various sources of uncertainty such as insect damage, severe frost and disease that affect production, as well as a decrease in price, and increase in interest rates. Because of the risk involved, access to information on production practices, prices, and markets are crucial. 13. ADDENDUM 1. Due to rounding, totals may be slightly different from the sum of components. 2. The per acre equipment costs in Table 1 reflect both the value and the level of use (hours and years of use) of the machinery complement. Therefore this cost could be different from the per acre value of the machinery complement in Table 4. Establishment and Production Costs for Grapefruit, UCCE Riverside County, 1998 Page 8

9 REFERENCES 1. American Society of Agricultural Engineers American Society of Agricultural Engineers Standards Yearbook. St. Joseph, MI. 2. Boelje, Michael D., and Vernon R. Eidman Farm Management. John Wiley and Sons. New York, NY. 3. University of California, Statewide IPM Project Integrated Pest Management for Citrus, 2 nd Edition. Publication University of California Statewide IPM Project. Division of Agriculture and Natural Resources. Oakland, CA. 4. Haney, Phillip B., Joseph G. Morse, Robert F. Luck, Harry Griffiths, Elizabeth E. Grafton-Cardwell, and Neil V. O Connell Reducing insecticide use and energy costs in citrus pest management. University of California IPM Publication 15. University of California Statewide IPM Project. Division of Agriculture and Natural Resources. Oakland, CA. 5. Riverside County Agricultural Commissioner and Weights & Measures. Agricultural Production Report Office of the Agricultural Commissioner, Riverside County. Riverside, CA. 6. Takele, Etaferahu, N. Sakovich, D. Walton. Establishment and Production Costs, Lemons And Valencia Oranges Ventura County, University of California Cooperative Extension, Southern Region. Farm Management Economics Program. Moreno Valley, CA. 7. Takele, Etaferahu, G. Bender, D. Walton. Establishment and Production Costs, Lemons, San Diego County, University of California Cooperative Extension, Southern Region. Farm Management Economics Program. Moreno Valley, CA. 8. Takele, Etaferahu, G. Bender, D. Walton. Establishment and Production Costs, Valencia Oranges, San Diego County, University of California Cooperative Extension, Southern Region. Farm Management Economics Program. Moreno Valley, CA Establishment and Production Costs for Grapefruit, UCCE Riverside County, 1998 Page 9

10 ACKNOWLEDGMENT We express our appreciation to those growers and other cooperators who provided data for the development of this cost study. Also we acknowledge Delos Walton for his involvement as Staff Research Associate on the initial stages of these studies. The use of trade names in this report does not constitute an endorsement or recommendation by the University of California nor is any criticism implied by omission of other similar products. Univers ity of Calif ornia Cooperative Extension Etaf erahu Takele Ar ea Farm Advisor, Agr icultur e Economics Souther n Region Box Springs Road Moreno Valley, CA Phone: (909) x 243 Fax: (909) E- Mail: takele@ucrac1.ucr.edu Peggy Mauk Farm Advisor, Subtr opical H or ticultur e Riverside County Box Springs Road Moreno Valley, CA Phone: (909) x 224 Fax:( 909) E- Mail: pamauk@ucdavis.edu The University of California prohibits discrimination against or harassment of any person employed by or seeking employment with the University on the basis of race, color, national origin, religion, sex, physical or mental disability, medical condition (cancer-related or genetic characteristics), ancestry, martial status, age, sexual orientation, citizenship, or status as a covered veteran (special disabled veteran. Vietnam-era veteran or any other veteran who served on active duty during a war or in a campaign or expedition for which a campaign badge has been authorized). University Policy is intended to be consistent with the provisions of applicable State and Federal laws. Inquiries regarding the University s nondiscrimination policies may be directed to the Affirmative Action/Staff Personnel Services Director, University of California, Agriculture and Natural Resources Franklin, 6th Floor, Oakland, CA (510) University of California and the United States Department of Agriculture cooperating. Published October 1999 Establishment and Production Costs for Grapefruit, UCCE Riverside County, 1998 Page 10

11 U.C. COOPERATIVE EXTENSION Table 1. SAMPLE COSTS PER ACRE TO ESTABLISH A GRAPEFRUIT GROVE RIVERSIDE COUNTY Labor Rates: $12.40/hr. Machine Trees/acre: 152 $10.00/hr. non-machine Long Term Interest Rate: 7.81% Cost Per Acre Year 1st 2nd 3rd 4th 5th Yield: 50 Pound Field Boxes Per Acre OPERATING COSTS: Pre-Planting Costs: Land Preparation - Clear Land 300 Mark & Layout Grove 100 Total Pre-Planting Costs 400 Planting Costs: Plant Trees 380 Grapefruit Tree 1,216 Total Planting Costs 1,596 Replanting Costs: Replant Trees: Labor 8 Trees Total Replanting Costs: 32 Cultural Costs: (Materials & Labor & Fuel, Lube & Repair) Irrigation Fertilization Foliar Spray Pruning Chop Prunings 4 Herbicide - Roundup Row Spray Herbicide - Spot Spray Herbicide - Pre-Emergent Mow Middles Fungicide - Ridomil Thrips Treatment Biological Controls Vertebrate Pest Control Leaf Analysis Ant Treatment Pick-Up Truck Use ATV Use Total Cultural Costs: ,039 1,206 Harvests Costs: Pick, Haul & Field Overhead - $1.30 per 50 Pound Field Box Packing - $3.70 per 50 Pound Field Box - 46% Crop Juice - $0.50 per 50 Pound Field Box - 52% Crop Total Harvest Costs: ,631 Interest on Operating 10.00% TOTAL OPERATING COSTS 2, ,135 1,591 2,958 Cash Overhead Costs: Liability Insurance Office Expenses Property Taxes Property Insurance Investment Repairs TOTAL CASH OVERHEAD COSTS TOTAL CASH COSTS 3,117 1,229 1,538 2,014 3,402 INCOME FROM PRODUCTION ,625 NET CASH COSTS FOR THE YEAR 3,117 1,229 1,139 1, ACCUMULATED NET CASH COSTS 3,117 4,346 5,485 6,711 7,488 Establishment and Production Costs for Grapefruit, UCCE Riverside County,

12 U.C. COOPERATIVE EXTENSION Table 1 continued Depreciation: Shop Building Shop Tools Fuel Tanks & Pumps Irrigation Equipment TOTAL DEPRECIATION Interest on Investment: Shop Building Shop Tools Fuel Tanks & Pumps Irrigation Land Establishment Costs Equipment TOTAL INTEREST ON INVESTMENT 818 1,061 1,157 1,246 1,345 TOTAL COST FOR THE YEAR 4,101 2,456 2,861 3,419 4,915 INCOME FROM PRODUCTION ,625 TOTAL NET COST FOR THE YEAR 4,101 2,456 2,462 2,631 2,290 TOTAL ACCUMULATED NET COST 4,101 6,557 9,019 11,650 13,940 Establishment and Production Costs for Grapefruit, UCCE Riverside County,

13 Table 2. U.S. COOPERATIVE EXTENSION COSTS PER ACRE TO PRODUCE MATURE GRAPEFRUIT RIVERSIDE COUNTY Operation Cash and Labor Costs per Acre Time Labor Fuel,Lube Material Custom/ Total Your OPERATION (Hrs/A) Cost & Repairs Cost Rent Cost Cost CULTURAL: Irrigation Prune Trees Hedge & Trim Trees Chop Brush Pre-Emergent Herbicicde Foliar Spray Fertilizer Spot Spray Herbicide Vertebrate Pest Management Ant Treatment Thrips Treatment Biological Control Leaf Analysis Growth Regulator Bordeaux Treatment Fungicide - Ridomil Pick-Up Truck ATV TOTAL CULTURAL COSTS ,327 HARVEST Harvest , ,283 TOTAL HARVEST COSTS , ,283 INTEREST on operating 10.00% 146 TOTAL OPERATING COSTS/ACRE , ,757 CASH OVERHEAD: Liability Ins. RC 12 Office Exp Rc Property Taxes 146 Property Insurance 104 Investment Repairs 87 TOTAL CASH OVERHEAD COSTS 399 TOTAL CASH COSTS/ACRE 4,156 NON-CASH OVERHEAD Per producing Annual Costs INVESTMENT: acre Capital Recovery Shop Building Citr Shop Tools Fuel Tanks & Pumps Land RC Grapefruit 8,420 0 Irrigation RC , RC Grapefruit Establishment 7, Equipment 1, TOTAL NON-CASH OVERHEAD COSTS 9,707 1,005 1,005 TOTAL COSTS/ACRE 5,161 Establishment and Production Costs for Grapefruit, UCCE Riverside County,

14 Table 3. U.C. COOPERATIVE EXTENSION COSTS AND RETURNS PER ACRE TO PRODUCE MATURE GRAPEFRUIT RIVERSIDE COUNTY Labor Rate: $ 12.40/hr. machine labor Interest Rate: 10.00% $ 10.00/hr. non-machine labor Quantity Price or Value or Your INCOME per Acre Unit Cost/Unit Cost/Acre Cost GROSS RETURNS Grapefruit box ,675 TOTAL GROSS RETURNS FOR GRAPEFRUIT 3,675 OPERATING COSTS Irrigation: Water acin Contract: Prune Trees 1.00 acre Hedge & Trim 1.00 acre Vertebrate Pest 1.00 acre Decollate Snails 1.00 acre Aphytis Melinus 1.00 acre Leaf Analysis 1.00 acre Herbicide: Karmex 4.00 lb Roundup -Spot Spry oz Fertilizer: Zinc Sulfate 5.00 lb Manganese Sulfate 5.00 lb Phosphorous acid 1.00 lb Liquid N lb N Insecticide: Lorsban - Ants 2.00 pint Dimethoate 4.00 pint Grwth Regltr: 2, 4D 5.00 oz Fungicide: Copper Sulfate 5.00 lb Ridomil 0.67 lb Harvest: Pick, Haul etc box Packing box ,191 Juice box Labor (machine) hrs Labor (non-machine) 7.75 hrs Fuel - Gas gal Fuel - Diesel gal Lube 5 Machinery repair 21 Interest on operating 10.00% 146 TOTAL OPERATING COSTS/ACRE 3,757 NET RETURNS ABOVE OPERATING COSTS -82 Establishment and Production Costs for Grapefruit, UCCE Riverside County,

15 U.C. COOPERATIVE EXTENSION Table 3 continued CASH OVERHEAD COSTS: Liability Ins. RC 12 Office Exp Rc Property Taxes 146 Property Insurance 104 Investment Repairs 87 TOTAL CASH OVERHEAD COSTS/ACRE 399 TOTAL CASH COSTS/ACRE 4,156 NON-CASH OVERHEAD COSTS (CAPITAL RECOVERY) Shop Building Citr 43 Shop Tools 37 Fuel Tanks & Pumps 37 Land RC GRAPEFRUIT 0 Irrigation RC RC Grapefruit Establishment 626 Equipment 140 TOTAL NON-CASH OVERHEAD COST/ACRE 1,005 TOTAL COSTS/ACRE 5,161 NET RETURNS ABOVE TOTAL COSTS -1,486 Establishment and Production Costs for Grapefruit, UCCE Riverside County,

16 Table 4. U.C. COOPERATIVE EXTENSION MONTHLY CASH COSTS PER ACRE TO PRODUCE MATURE GRAPEFRUIT RIVERSIDE COUNTY Beginning FEB 97 FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN TOTAL Ending JAN Cultural: Irrigation Prune Trees Hedge & Trim Trees Chop Brush 4 4 Pre-Emergent Herbicicde Foliar Spray Fertilizer Spot Spray Herbicide Vertebrate Pest Management Ant Treatment Thrips Treatment Biological Control Leaf Analysis 5 5 Growth Regulator Bordeaux Treatment Fungicide - Ridomil Pick-Up Truck ATV TOTAL CULTURAL COSTS ,327 Harvest: Harvest ,283 TOTAL HARVEST COSTS ,283 Interest on oper. capital TOTAL OPERATING ,757 COSTS/ACRE OVERHEAD: Liability Ins. RC Office Exp Rc Property Taxes Property Insurance Investment Repairs TOTAL CASH OVERHEAD COSTS TOTAL CASH COSTS/ACRE ,156 Establishment and Production Costs for Grapefruit, UCCE Riverside County,

17 Table 5. U.C. COOPERATIVE EXTENSION WHOLE FARM ANNUAL EQUIPMENT, INVESTMENT, AND BUSINESS OVERHEAD COSTS RIVERSIDE COUNTY ANNUAL EQUIPMENT COSTS Cash Overhead Yrs Salvage Capital Insur- Yr Description Price Life Value Recovery ance Taxes Total HP 2WD Tractor 25, ,549 2, , ATV 4WD 3, Herbie Sprayer Mower - Flail 6' 3, Orch.Sprayer 500 G 17, ,706 1, , Pickup Truck 1/2 T 17, ,716 3, , Weed Sprayer 200 G 3, TOT AL 70,520 7,052 8, , % of New Cost * 42,312 4,231 5, ,733 * Used to reflect a mix of new and used equipment. ANNUAL INVESTMENT COSTS Cash Overhead Yrs Salvage Capital Insur- Description Price Life Value Recovery ance Taxes Repairs Total INVESTMENT Fuel Tanks & Pumps 12, ,250 1, ,765 Irrigation RC , ,700 4, ,400 7,597 Land RC GRAPEFRUIT 319,960 2,281 3, ,470 RC Grapefruit Establishment 284, ,458 23,776 1,116 1, ,457 Shop Building Citr 20, ,000 1, ,223 Shop Tools 12, ,250 1, ,765 TOTAL INVESTMENT 706,542 38,658 32,865 3,797 5,326 3,300 70,277 ANNUAL BUSINESS OVERHEAD COSTS Units/ Price/ Total Description Farm Unit Unit Cost Liability Ins. RC 1 Farm Office Exp Rc Acre Establishment and Production Costs for Grapefruit, UCCE Riverside County,

18 Table 6. U.C. COOPERATIVE EXTENSION HOURLY EQUIPMENT COSTS RIVERSIDE COUNTY GRAPEFRUIT COSTS PER HOUR Actual CASH OVERHEAD OPERATING Hours Capital Insur- Fuel & Total Total Yr Description Used Recovery ance Taxes Repairs Lube Oper. Costs/Hr HP 2WD Tractor ATV 4WD Herbie Sprayer Mower - Flail 6' Orch.Sprayer 500 G Pickup Truck 1/2 T Weed Sprayer 200 G Establishment and Production Costs for Grapefruit, UCCE Riverside County,

19 Table 7. U.C. COOPERATIVE EXTENSION RANGE ANALYSIS RIVERSIDE COUNTY COSTS PER ACRE AT VARYING YIELD TO PRODUCE GRAPEFRUIT YIELD (BOX/ACRE) OPERATING COSTS/ACRE: Cultural Cost 1,327 1,327 1,327 1,327 1,327 1,327 1,327 Harvest Cost 1,598 1,827 2,055 2,283 2,512 2,740 2,968 Interest on operating capital TOTAL OPERATING COSTS/ACRE 3,046 3,283 3,520 3,757 3,994 4,230 4,467 TOTAL OPERATING COSTS/BOX CASH OVERHEAD COSTS/ACRE TOTAL CASH COSTS/ACRE 3,445 3,682 3,919 4,156 4,393 4,630 4,867 TOTAL CASH COSTS/BOX NON-CASH OVERHEAD COSTS/ACRE 1,663 1,663 1,663 1,663 1,663 1,663 1,663 TOTAL COSTS/ACRE 5,108 5,345 5,582 5,819 6,056 6,293 6,530 TOTAL COSTS/BOX NET RETURNS PER ACRE ABOVE OPERATING COSTS FOR GRAPEFRUIT PRICE YIELD (DOLLARS/BOX) (50 lb BOXES/ACRE) GRAPEFRUIT $ ,248-1,228-1,208-1,188-1,168-1,148-1,128 $ $ $ $ $ ,062 1,266 $ ,017 1,258 1,498 1,739 Establishment and Production Costs for Grapefruit, UCCE Riverside County,

20 PRICE (DOLLARS/BOX) RANGING ANALYSIS (Continued) NET RETURNS ABOVE CASH COSTS FOR GRAPEFRUIT YIELD (50 lb BOXES/ACRE) GRAPEFRUIT $ ,647-1,627-1,607-1,587-1,567-1,547-1,527 $ ,387-1,330-1,273-1,216-1,159-1,102-1,045 $ ,133-1, $ $ $ $ ,099 1,339 PRICE (DOLLARS/BOX) NET RETURNS PER ACRE ABOVE TOTAL COSTS FOR GRAPEFRUIT YIELD (50 lb BOXES/ACRE) GRAPEFRUIT $ ,310-3,290-3,270-3,250-3,230-3,210-3,190 $ ,050-2,993-2,936-2,879-2,822-2,765-2,708 $ ,795-2,702-2,608-2,515-2,421-2,328-2,234 $ ,536-2,405-2,275-2,144-2,013-1,883-1,752 $ ,276-2,108-1,941-1,773-1,605-1,438-1,270 $ ,021-1,817-1,613-1,409-1,205-1, $ ,766-1,526-1,285-1, Establishment and Production Costs for Grapefruit, UCCE Riverside County,